Correlation Between MayAir Technology and Huasi Agricultural

Can any of the company-specific risk be diversified away by investing in both MayAir Technology and Huasi Agricultural at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining MayAir Technology and Huasi Agricultural into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between MayAir Technology Co and Huasi Agricultural Development, you can compare the effects of market volatilities on MayAir Technology and Huasi Agricultural and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in MayAir Technology with a short position of Huasi Agricultural. Check out your portfolio center. Please also check ongoing floating volatility patterns of MayAir Technology and Huasi Agricultural.

Diversification Opportunities for MayAir Technology and Huasi Agricultural

0.25

Correlation Coefficient

MayAir Technology  Huasi Agricultural

Modest diversification

The 3 months correlation between MayAir and Huasi is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding MayAir Technology Co and Huasi Agricultural Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Huasi Agricultural and MayAir Technology is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on MayAir Technology Co are associated (or correlated) with Huasi Agricultural. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Huasi Agricultural has no effect on the direction of MayAir Technology i.e., MayAir Technology and Huasi Agricultural go up and down completely randomly.

Pair Corralation between MayAir Technology and Huasi Agricultural

Assuming the 90 days trading horizon MayAir Technology Co is expected to generate 1.0 times more return on investment than Huasi Agricultural. However, MayAir Technology Co is 1.0 times less risky than Huasi Agricultural. It trades about 0.01 of its potential returns per unit of risk. Huasi Agricultural Development is currently generating about -0.01 per unit of risk. If you would invest  3,545  in MayAir Technology Co on October 25, 2024 and sell it today you would lose (136.00) from holding MayAir Technology Co or give up 3.84% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	99.79%
Values	Daily Returns

MayAir Technology Co  vs.  Huasi Agricultural Development

MayAir Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MayAir Technology Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Huasi Agricultural

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Huasi Agricultural Development are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Huasi Agricultural is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with MayAir Technology and Huasi Agricultural

The main advantage of trading using opposite MayAir Technology and Huasi Agricultural positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MayAir Technology position performs unexpectedly, Huasi Agricultural can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Huasi Agricultural will offset losses from the drop in Huasi Agricultural's long position.

The idea behind MayAir Technology Co and Huasi Agricultural Development pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.